Time Is Money - Economist Justin Wolfers Offers Advice on How to Spend Your Free Time Wisely. What's the Opportunity Cost?

 

But the foundation of all economics is something called opportunity cost.  It says that the true cost of something is the alternative you have to give up.  So each hour that I spend running (or blogging or gardening or Facebooking or watching TV) is an hour that I don't spend hanging out, working, or sleeping.  How do I choose?                          

  -Justin Wolfer, business & public policy teacher at The Wharton School at the University of Pennsylvania-

Yesterday after work I planned to go to the gym, but I changed my mind.  It was 72 degrees & sunny.  I headed home, put on my workout clothes, attached the nifty radio receiver I have for my IPOD nano & set off for an hour long walk, listening to NPR.

Marketplace Money came on with their series, Econ Fun-01--about what economists do with their free time.  Listening to Justin Wolfers talk about the "Time is Money" conundrum is making me do some serious rethinking about how I'm spending my limited "free time".

Look, we only have so much time in a day.  I'm at a big disadvantage right from the get-go because I live "way out"--about a 45-50 minute commute to work--a 20 minute drive to where I work-out--a 30 minute drive from lots of my friends, my favorite movie theater, and decent shopping. 

But I love where I live--it's green and open and quiet and peaceful--and my house is paid-off.  Moving is non-negotiable for now.

I've got some other "time-user-uppers" that are also non-negotiable:

1.  I need 7-8 hours of sleep
2.  I try to exercise at least 5 days a week for 60 minutes
3.  Healthy eating takes lots of time to shop & prepare for.  I "make" breakfast, lunch & dinner, and I enjoy cooking.
4.  Work
5.  Weekend evenings are reserved for socializing
6.  If I want a good night's sleep, I need to just do something mindless after 9:00 pm, like TV, magazines, or book skimming
7.  I would never say "no" to an important activity or event involving family or friends 

Justin's hobby of choice is training for a marathon.  My hobby of choice--reading about health & wellness, and blogging about it--is a huge time-sucker.  But I love it.  I love learning new things and taking the time to capture them on a computer.  I love the positive feedback from readers all over the world.  But, I have far too much to write about than I have time for and that creates its own stress.

And frankly, Justin is right!  There is an opportunity cost. 

1.   Less time to do nothing--don't discount that one.
2.   Less time to hang out with friends, or take long leisurely walks.
3.   Less time to organize & fix up my house.
4.   Less time to volunteer.
5.   Less time to sit on the couch & read an entire book.
6.   Less time to meditate.
7.   Less time to spend with my husband.
8.   Less time to work in my garden.
9.   Less time to switch gears & pick up a new hobby.
10. Less time to clean up my messes, organize my photos, to learn something new.
11. Less time to just talk.

We all have our hobbies. 

And we all have our time-wasters.  What can we cut out?  Or is it possible that some time-wasters are   mind-savers because they help us to wind-down & chill-out?  Facebook, Twitter, favorite-must-check-daily websites, ESPN, HGTV, sudoku, garage sales, computer games, talking on the phone, texting, you-fill-in-the blank. 

If the internet is your time-wasting addiction of choice, you MUST READ a recent article in Slate that shows how it adversely affects our brains, and why it's actually a most unsatisfying activity!  Seeking:  How the Brain Hard-Wires Us to Love Google, Twitter, and texting.  And Why That's Dangerous.  by Amy Yoffe.  Click here for the article.  After reading Amy's article I'm definitely curbing my laptop usage.

Want to waste some time seeing how Americans spend their day?  Check out this interesting interactive graphic.  How are we spending our time?

The problem: 

According to Justin: "And as I spend my hours slugging out the miles, I'm forced to confront my choices.  Instead of sweating it out on the trails, I could take on extra teaching and earn a few extra bucks.  And so going running costs me good money."

"The same logic applies to you.  Each hour you spend on your hobby you don't spend working harder to get a promotion, studying for a degree, or shopping around for the cheapest groceries."

According to me: "Or, each hour you spend on your hobby you don't spend with your spouse, friends, family, neighbors, getting your house in order, having fun or just plain relaxing."

So, am I going to keep on blogging, or am I going to give it up for more walks, housework, reading, Mahj games, and meditation?  Something to think about.  "I keep doing an activity only as long as it yields greater benefits than the alternative."

This not having enough time to do everything is a running theme for me.  It's my "Fighting Entropy" syndrome and I've written about it here and here.

Justin's Marketplace transcript:

If You Run the Numbers, It's a Good Time  click here
 

JUSTIN WOLFERS: I'm not just an economist, I'm also a runner, training for the Marine Corps Marathon.

Runners World magazine recently argued that marathon running is an incredibly cheap sport. All you need is a pair of shoes, and you're off and running. But they're wrong.

You see, they were emphasizing the out-of-pocket cost, which is small. But the foundation of all economics is something called opportunity cost. It says that the true cost of something is the alternative you have to give up.

So each hour that I spend running is an hour that I don't spend hanging out, working, or sleeping. How do I choose? Following economic theory, I keep doing an activity only as long as it yields greater benefits than the alternative.

And as I spend my hours slugging out the miles, I'm forced to confront my choices. Instead of sweating it out on the trails, I could take on extra teaching and earn a few extra bucks. And so going running costs me good money.

The same logic applies to you. Each hour you spend on your hobby is an hour you don't spend working harder to get a promotion, studying for a degree, or shopping around for the cheapest groceries.

By my calculations my 16-week training program comes at an opportunity cost of several thousand dollars. A quicker runner would have a smaller opportunity cost. It's only because I'm both slow and an economist that I fret that the world's cheapest sport is actually incredibly expensive.

But to an economist, the choice is still a no-brainer. We think you should only do what you love, and pay for it by doing what you are good at.

By sticking to economics, I make time for running. Rather than spend hundreds of dollars worth of time cleaning my house each Sunday, I hire a cleaner, who does a better job, at a better price.

When a friend asks me to help them move, I write them a check to pay professional movers instead. It's just more efficient.

And while it can be hard to forgo extra income for a long run, it is even harder to justify wasting that time on Facebook. And with the time that saves, I'm pulling on my shoes to head out for another run.

Justin Wolfers teaches business and public policy at The Wharton School at the University of Pennsylvania.

 

Comments

[Becky]

So, here is another aspect to the opportunity cost issue...

Reading your blog allows me (and many others) to get to know you on another level, or to think about things that are on your mind and then they offer a unique opportunity to think & talk to others about some of these issues.

I think that is a pretty efficient use of time; it is enriching rather than dissipating of one's time and energies.

Of course this is coming to you from someone who just slept in, is looking at and listening to the ocean, just begged off on a charter fishing trip and is anxiously looking forward to lollygagging (sp?) on the beach ALONE the entire afternoon reading a bunch of magazines and one book.

When I get back I may be looking at things differently.

Thank you for always offering me a few new things to think about..............please don't cut out the blogging! Cut out the cleaning and organizing !!!!

[Beverly Alexander]

I read the following article -
Seeking: How the Brain Hard-Wires Us to Love Google, Twitter, and texting. And Why That's Dangerous. by Amy Yoffe.

It is terribly true. I am writing this at 2:00 am and have to get a kid to school in the morning.

I thought that curiosity and the search for knowledge were absolutely good.

This article is not your typical self-help item or a little tidbit of information - I feel as if my boat has capsized!

Back to the real world...and sleep.

By the way, thank you. This may change things for me.

[The Healthy Librarian]

Hi Bev,

Glad you read the article. Yes--it really had an effect on me too--so I'm glad I had the opportunity to read it.

I always suspected there was some sort of dopamine release when it came to seeking & finding new information--after all--I am a librarian, and that's what I do.

Many of my colleagues feel the same way--which is why we're in this field.

But now I'm clued in to the "nasty" side of this--the addictive, keep-on-seeking, not satisfied with the answer, treadmill part of google.

Having read Barry Schwartz--The Paradox of Choice--that explains the huge down side of too many choices and how some of us get stuck needing to look at all our options for even the most minor of purchases--like a new coffee pot--I've pretty much made peace with the need to stop after I've spent a reasonable amount of time looking for something.

For me, being aware of the effect of google on the brain 100% helps me to put the brakes on----It helps me to distinguish between those times when I'm legitimately looking for information and when I'm just needlessly wasting precious time.